Jefferies Cuts Roblox Target to $85 on 45x-30x EBITDA Multiple Shift
Jefferies cut Roblox’s price target to $85 from $100 ahead of fourth-quarter results, citing cautious sentiment and anticipating fiscal 2026 bookings growth below 20%, which drove the forward EBITDA multiple down from 45x to 30x on $1.93 billion EBITDA. Analysts’ average price targets still imply a 55.9% upside.
1. Analysts Foresee Substantial Upside Potential
Wall Street analysts have lifted their consensus price targets on Roblox to imply roughly a 55.9% upside from current trading levels. According to FactSet data, 25 brokerage firms cover the stock, and 18 have raised their earnings estimates for fiscal years 2025 and 2026 over the past three months. The mean of these upward revisions suggests that consensus revenue per daily active user could climb by more than 20% year-over-year in fiscal 2026, driven by higher average bookings per user and sustained engagement in key markets such as North America and Europe. Investor focus will remain on whether management can convert robust developer activity into accelerated monetization across both domestic and international geographies.
2. AI Initiatives Poised to Extend Revenue Runway
Roblox is integrating artificial intelligence tools to bolster creator productivity, improve content discovery and enhance platform efficiency. The company’s new generative-AI toolkit is expected to cut average game development time by up to 30%, based on internal pilot results. Meanwhile, enhancements to the recommendation engine—powered by a proprietary machine-learning model trained on over 12 billion user actions per month—have lifted daily session length by 8% in trial markets. Management has flagged these initiatives as critical to sustaining mid-20% bookings growth beyond 2026, by driving a deeper catalog of high-quality experiences and unlocking new premium monetization channels such as AI-powered virtual items and dynamic in-game events.
3. Jefferies Lowers Forecast on Cautious Outlook
Jefferies trimmed its long-term valuation multiple from 35x to 30x forward EBITDA and adjusted its fiscal 2026 bookings growth projection to below 20%, reflecting what it describes as heightened uncertainty around the full-year guidance. The firm noted that stable user trends into January help de-risk the near term, but difficult year-over-year comps in the back half of 2026 and potential margin pressure remain key concerns. Roblox’s trailing twelve-month EBITDA stood at approximately $1.93 billion entering the fourth quarter, and Jefferies believes that any guidance shortfall could trigger further multiple contraction despite the platform’s strong operating leverage.